Alibaba Continues To Expand Cloud Data Center Footprint

Chinese e-commerce and cloud services giant Alibaba is opening a fifth data center in Shenzhen in support of its cloud, AliCloud. The data center will house approximately 10,000 servers.

AliCloud posted $38 million in revenue last June, a very small portion of its multi-billion revenue (around $2.54 billion in USD). However, it is a quickly growing segment and the company continues to open data center locations in support. As we reported in May, the company recently launched a data center in Beijing and another one in Hong Kong.

The services include cloud servers (called Elastic Computing Servers), storage, relational database and content delivery network, all on a pay-as-you-go basis, much like offerings you can find in service portfolios of its U.S. counterparts, such as Amazon Web Services or Google Cloud.

The data center will serve "large and small companies, financial institutions and other third parties in southern China," the company said.

The cloud platform is called Apsara. It is built using the Alibaba’s own proprietary technology that enables massive scalability. “A single Apsara cluster can be scaled up to 5,000 servers with 100 petabyte storage capacity and 100,000 CPU cores,” the company wrote in the SEC documents.

The company developed an advanced proprietary technology stack to support its growing empire earlier this year. The distributed system, living in data centers in China and Hong Kong, supports a multitude of cloud-based services, including rentable infrastructure resources and sophisticated Big Data analytics for marketers.

China is a massive untapped cloud market. While the likes of Amazon Web Services and Microsoft Azure are making their way into China, Alibaba represents the biggest local competition going forward.

There is also an expansion to the North American market on the horizon. Already a major competitor to U.S.-based e-commerce and cloud giants in China, Alibaba’s potential U.S. expansion would bring another big player into the North American market.

Alibaba’s upcoming IPO is expected to be the biggest IPO on U.S. markets since Facebook’s $16 billion float in 2012. The offering is expected to yield between $15 billion and $20 billion for the company.

One of the biggest beneficiaries of the offering will be Yahoo, which owns about 23 percent of the company. Yahoo’s stake in Alibaba is the second largest after Japanese telco SoftBank’s 34 percent stake.